The Fed was careful not to spook markets this week, providing guidance that another round of tapering didn’t mean the end of accommodative monetary policy anytime soon. This kept investors happy, but it might not be good news for the economy. Former Federal Reserve governor Kevin Warsh and Duquesne Capital founder Stanley Druckenmiller argue that balance-sheet solution to our balance sheet recovery isn’t creating sustainable wealth because it isn’t directing investment to where it can benefit the broader environment.
Druckenmiller: Financial engineering is taking priority over capex
“Corporate chieftains rationally choose financial engineering—debt-financed share buybacks, for example—over capital investment in property, plants and equipment,” they write in a Wall Street Journal op-ed.
The problem is that half of American households...
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